Are the lights about to go out on Britain's first superclub? Ministry of Sound is revered across the globe, so why does its fate now lie in the hands of Boris Johnson?

Later this month, London’s mayor will hold a public hearing and then determine whether
to grant planning permission for a 41-storey block of flats on the site
of the disused Eileen House, just 20 yards from the club

Revered: The future of Ministry of Sound, arguably the centre of the global dance music scene, is in jeopardy

A typical Sunday in Southwark. It’s after 2am, but the pavement opposite the disused social-security offices in Gaunt Street, a few minutes’ walk from the Elephant and Castle roundabout, is heaving.

The queue to get into Ministry of Sound, London’s last remaining ‘superclub’ and arguably the centre of the global dance-music scene, still stretches to the end of the street.

Those waiting in line – young and not so young alike – are happily making as much noise as they like. No one minds, mainly because there’s no one around to hear them.

The last revellers won’t leave until many people are waking up to make breakfast and read the Sunday papers, and in the summer, the party sometimes continues outside in the club’s front yard until late afternoon.

Equipped with a spotless, acoustically perfect dance space and a £1 million sound system, Ministry of Sound has occupied this site for 22 years.

It has become an institution, the beating heart of a business that employs 200 people, has nurtured the talents of generations of DJs and musicians, and, through its own record label, sold more than 50 million albums.

In an average year, about 300,000 people will flock through the club’s doors, half of them tourists giving a significant boost to London’s economy.

Protest: Artist Example (front right) and Ministry chief executive Lohan Presencer present a petition to Southwark Council protesting against the new development

Now, however, its future is in jeopardy. Later this month, London’s mayor Boris Johnson – whose own energetic dancing was televised during the Olympic opening ceremony – will hold a public hearing and then determine whether to grant planning permission for a 41-storey block of flats on the site of the disused Eileen House, just 20 yards from the club.

Permission to build the tower – which is being sought by Oakmayne Properties, a firm with a history of tax avoidance – has already been refused by Southwark Council.

However, Mayor Johnson has exercised his rarely used legal powers to ‘take over’ the application.

If he approves it, Ministry’s demise is inevitable, says club co-founder and chairman James Palumbo.

‘The developers claim they can coexist with us. But you can’t build a 41-storey residential tower block that close and expect us to be able to continue in business, because the residents won’t have it.

Public hearing: Boris Johnson exercised his rarely used legal powers to 'take over' the application

‘I went to the club last weekend, and out on the street it was busy and noisy. I wouldn’t want to live next to it if I’d just bought a £500,000 flat, and if they build this tower as planned, the people who move in won’t want to either.

We’ve seen exactly the same thing close another club down the road – it’s a genuine threat to our existence. As for us moving somewhere else, how could we find another site where we can be open 24 hours a day and make as much noise as we like? And anyway, why should we?’

Ministry’s chief executive, Lohan Presencer, cut his music-industry teeth in the rave scene of the early Nineties, which was dealt a mortal blow by former Home Secretary Michael Howard’s 1994 Criminal Justice and Public Order Act.

This granted tough powers to the police to shut down unauthorised gatherings where the music was ‘wholly or predominantly characterised by the emission of a succession of repetitive beats’ (the Government, it appeared, didn’t much care for what was then called techno or house).

In the Act’s wake came the era of the
superclubs, each holding 1,000 people or more: along with Ministry,
Gatecrasher in Sheffield, Renaissance in Derby and Cream in Liverpool.
Victims of developers or poor management decisions, all the others have
now closed.

Ministry, however, has not merely clung on, but grown into a global brand with a turnover in excess of £50 million a year.

Along the way it has launched the careers of, among others, Example, Daniel Bedingfield, Eric Prydz and So Solid Crew.

Bands that have played live in the club include D12 with Eminem, the Cocteau Twins, Metallica, Pulp and the Prodigy.

The
video for Take That’s Relight My Fire was also shot there, along with
club scenes for numerous movies, from The Dark Knight Rises to The
Inbetweeners.

In the
Nineties, Palumbo fought a long, tense battle with local gangsters to
make the club drug-free: ‘I literally risked my life,’ he says.

‘What we’ve built here is truly special and unique. That’s why I’m determined to fight for it.’

This struggle, he adds, has so far cost more than £1 million in legal and other fees.

It’s hard to imagine a business more different to Ministry than Oakmayne, the developer behind the proposed tower.

The firm’s founder and former chairman, Christopher Allen, is a controversial figure.

Companies House records confirm that at least 20 of the firms of which he has been a director since 1992 have since been dissolved, while in the Nineties he pursued an unsuccessful scheme to turn a former East German Stasi holiday camp at Potsdam into a luxury development.

The proposed development at Eileen House

Owing to a bitter legal dispute between Palumbo and his father 20 years ago, Ministry of Sound is ultimately owned by an offshore, Jersey trust – a device established to protect the club in the event that Palumbo lost.

But Live has seen documents showing that the business pays VAT, corporation and other UK taxes in full, contributing almost £10 million to the Exchequer each year.

Oakmayne, registered in the Isle of
Man, pays no UK tax. Last year, one of its staff was recorded boasting
how the company had set up ‘special purpose vehicles’ to enable buyers
of homes in its most prestigious development – Cornwall Terrace,
overlooking Regent’s Park – to avoid stamp duty.

The
asking prices for these houses were around £35 million – a sum that
would normally entail stamp duty of £2.45 million. But instead, the
houses were sold via offshore companies, which meant the sales were
tax-exempt. Oakmayne’s spokesman told Live, ‘Oakmayne’s arrangements are
a perfectly legitimate and legal way of organising tax.’

Meanwhile,
Allen and his wife, the former ballet producer Katharine Doré, are
facing a High Court case next month concerning allegations made by a
creditor seeking £400,000. Doré had set up an educational charity, the
Golden Hinde Trust, which leased a replica of the ship once sailed by
Sir Francis Drake from a man named Roddy Coleman. In 2009, the trust
went bust, leaving unpaid debts.

Allen
– who refused to answer any questions about this or any other aspect of
his affairs – referred Live to Oakmayne’s spokesman, who claimed the
pending case against Allen and Doré was ‘vindictive and malicious’.

Last
September, Allen stepped down from Oakmayne, and in a statement issued
in the name of his successor as chairman, David Humbles, declared he no
longer had any financial interest in the firm.

Reached
at his Isle of Man office, Humbles denied that Allen’s departure had
anything to do with negative publicity over Oakmayne’s stamp-duty
avoidance or the Golden Hinde case, saying, ‘He’s merely retired. He’s
beyond retirement age, and so it’s nothing surprising.’

Actually, Allen hasn’t retired from
other business interests: Live managed to contact him at the office of
another company, Fisherking Management (UK) Ltd.

Later his spokesman
confirmed, ‘I don’t think there’s any suggestion that Chris Allen has
retired. He is still working. He left Oakmayne because his job was done,
and he’s pursuing other interests.’

Institution: The Southwark superclub is the beating heart of a business that employs 200 and has nurtured the talents of generations of DJs

Although the Elephant and Castle lies in London’s Zone 1, close to the capital’s centre, it would be kind to describe the area as a work in progress.

Old, decaying council estates still predominate, along with run-down, shabby shops, while the huge and bewildering traffic interchange at the area’s heart is a significant obstacle to development.

It isn’t hard to see why town planners might have found a new 41-storey tower block, containing at least some affordable housing, an attractive prospect – whatever the consequences for the venerable nightclub opposite.

Indeed, when the application was submitted to Southwark Council, the planning officers recommended approval.

But when it came before the elected planning committee in October 2011, the opposite verdict was reached – with five votes against and one abstention.

It is a matter of record that James Palumbo is one of the Liberal Democrats’ most generous donors, having given the party more than £500,000 to date.

But both he and they insist that any suggestion of a link between his donations and the three Lib Dem committee members voting against the development is ‘ludicrous’.

‘I had no idea that Palumbo had ever made donations,’ says Councillor James Barber.

‘I voted against this because we already have a hideous council block nearby and this application aspires to create a building which is equally ugly. We just don’t need any more ugly buildings in Southwark.’

Labour councillor Neil Coyle is equally emphatic.

‘Eileen House would pack people into flats which are far too small, with far too little outdoor amenity space,’ he says.

‘The limit is supposed to be 1,100 habitable rooms per hectare, but the applicant is attempting to squeeze in 1,638, and all the one-bedroom flats from the 31st floor down are below minimum-size standards.

The club's co-founder and chairman, James Palumbo

The plans also contain nowhere near the recommended level of affordable housing, 35 per cent. For this to have been approved, there would have to have been some big overriding benefit. We just couldn’t see it.’

The potential damage to Ministry of Sound was, he adds, a consideration. But when this was put to Oakmayne, the firm rejected a proposal to seal all the windows facing the club so they couldn’t be opened: ‘That in itself would also have breached council standards.’

In any case, according to the plans, the flats on the club side would all have balconies.

In normal circumstances, rejection
by the council would have been the end of the matter. But to the
committee’s surprise, Boris Johnson then ‘called in’ the decision for
reconsideration, on the grounds that the area did have overriding
housing needs.

There
should have been a hearing along with a decision last spring, but it was
postponed because of the mayoral election; sources close to the mayor
have told us that Johnson didn’t want the focus to be on the tower
before the poll.

The mayor has only intervened in this way on five previous occasions, all involving much bigger developments.

‘I was incredulous when he called this in,’ says James Barber.

‘Eileen House isn’t strategic in London-wide terms.

'It’s not even tactical. It’s so
bizarre that my fear is he’s already made his mind up. And it’s not even
as if he’s supporting a London firm: if he nods this through, he’ll be
supporting a tax-exempt offshore company.’

The hearing is now set for February
26, with a decision expected that same day or shortly afterwards. With
the date fast approaching, Johnson’s staff said he could make no
comment.

In a statement
issued as we went to press, Oakmayne’s spokesman continued to insist
that whatever Ministry’s fears, the tower and the club could somehow
‘coexist’.

‘This has always been Oakmayne’s intention,’ he told Live.

‘It’s
been Ministry of Sound which has the problem. Instead of this
shroud-waving, they should see it’s simply not a question of one thing
or the other.’

Ministry
says it isn’t opposed to a residential building in principle, adding
that it’s still trying to engage with the developer to reach a
compromise.

In his
statement, Oakmayne’s spokesman also claimed that another 22-storey
residential building had already been approved, and that this was even
closer to the club than Eileen House.

In fact, in this he was mistaken: this other building is much further away, across a main road at the far end of the street.

He added that the plans are widely
supported by local residents and businesses – to which Ministry
responded by pointing out that 44,000 people have so far signed a
petition against them, in a campaign also supported by many other
businesses and numerous celebrities.

Among
them is Elton John, who has said, ‘I support Ministry of Sound 100 per
cent. They are the Rolls-Royce of dance music. Hands off, Boris!’

At
stake seems to be a fundamental question: how important are the arts
and culture in all their forms going to be to 21st-century London?

Last
year, a cultural report commissioned by Boris Johnson stated, ‘Culture
in all its diverse forms is central to what makes a city appealing to
educated people and hence to the businesses which seek to employ them.

'In
the globalised knowledge economy, having a well-educated workforce is
the key to success, and such workers demand stimulating, creative
environments… A rich and vibrant culture (is) an indirect source of
economic success.’

And
this, the report added, doesn’t just mean art galleries, opera and
theatre: ‘Culture is multidimensional and multilayered’, and just as
important is ‘informal culture, which takes place in other venues such
as pubs, clubs and restaurants’.

Indeed, the report says that nightclubs – a field in which London is already lagging behind cities such as New York and Shanghai – are of critical importance.

On February 26, Londoners will see whether these words have real meaning.

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Ministry of Sound is revered across the globe, so why does its fate now lie in the hands of Boris Johnson?